economy

January 13, 2026

Munis have a strong start to 2026. Where Wall Street sees opportunity

This is the ideal moment for investors to add municipal bonds, says strategist Tom Kozlik.

Munis have a strong start to 2026. Where Wall Street sees opportunity

TL;DR

  • Municipal bond prices have seen a strong start to the year, leading to falling yields.
  • Increased investor demand meeting less supply is contributing to the rising prices and falling yields.
  • Yields, while lower, are still considered attractive, offering a significant tax-equivalent yield for top tax bracket investors.
  • Experts suggest that investors should be ready to act to capitalize on the current market conditions.
  • Demand is expected to be a crucial factor for the performance of municipal bonds this year, with large amounts of new issuance projected.
  • Investment-grade municipal bonds are recommended, with caution advised for education bonds due to enrollment issues.
  • Intermediate-term duration is suggested as a strategy given expectations of a steepening yield curve and potential Federal Reserve rate cuts.

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